So you’ve finally made up your mind to write your very own business proposal? Well, say no more! Read on to know how you can finally create your very own business plan.
First things first, there is no right or wrong method to write a business proposal. Creating your very own business proposal isn’t that hard of a task to do as It all depends on what will you need the business plan for.
So relax, take a sip of coffee and kick back your legs before you read this article. Allow us to guide you through the process of writing your own business plan.
We’ve always heard that every business needs a business plan, but have you ever wondered what exactly is a business plan?
A business plan can be many things. But the general idea of a business plan is that it’s a detailed document that you use to describe your business and how this business can achieve its goal.
We work in an environment where changes are bound to happen. So as entrepreneurs, changes should be embraced and you should always be on your toes to evolve as necessary.
With that said, too many changes and evolutions might cause many entrepreneurs to lose their way or even forget their original goal. So, writing a business plan can act as a reminder to steer your business back on track.
As an entrepreneur, you’ve already signed up for risks and uncertainty. However, if you can fully understand the in and outs of your business, you might be able to mitigate these risks.
Creating a business plan means that you will be forecasting your business’s future cash flows. And every decision that you’ve made can be based on the projection to make them less risky.
Sometimes business ideas that are brought out in a meeting or conversation just do not cut out. To better analyse everything, you will need to write it down. And I mean the whole thing down.
Once you’ve written down the whole business plan and have analysed the market that you will be competing in, you can use the information to reevaluate and double-check if the idea proposed is viable or not.
Writing business proposals are mainly for yourself and your employees. But if there is an opportunity that an investor is interested to invest in your business, having a business plan at hand can be very useful.
Using the business plan created, you will just need minimal changes to make a pitch deck or a loan proposal for both investors and banks.
Creating a business plan makes your day-to-day business planning much more manageable. It also means you have already set a timeframe and also a deadline to accomplish a target or hit a milestone.
So, instead of aimlessly wondering what you should do today, a business plan can assure you that no days will go to waste, as every day will act as a countdown towards achieving your goal.
You might have heard of a Pitch Deck, which are slides that mainly show numbers to investors and encourage investors to invest in your company. These pitch decks can be used regardless of the stage of investment.
They are similar to each other don’t get me wrong, The only slight difference that a pitch deck has from a business plan is that pitch decks are only for external use while Business Plans are mainly for internal use.
You can always choose to create a business plan first and then update or refine it to a pitch deck. This makes the pitch deck much more believable and down to earth.
Yes, TLDR or Too Long; Didn’t Read is exactly what you think it is. It’s a summary of everything for people who didn’t read the whole essay.
Instead of going full 20 pages of long paragraphs, we recommend starting small and listing down all the main ideas first. It should be concise, straight to the point and easy to understand.
Preferably, your TLDR version Business plan should be summarized within one page that includes:
Who you are,
What’s the problem people commonly face,
your target markets,
your sales channels and
your future marketing activities.
If you’re wondering why should you summarize everything in one page, it’s actually for you and your potential investor’s easier reference.
Summarizing everything can be useful for you whenever you’d need to refer back to your business plan. Instead of going through a thick article, you can just refer back to one page that has everything.
On the other hand, it can also help an investor make decisions more efficient as the TLDR version is much more pleasant and transparent for investors to read through. So, summarizing everything in one page can be also a strategic method to win investors’ hearts.
Imagine that you have worked for long hours and if you were to read a book, would you choose to read a book with walls of text or a book with short and precise words?
See? That’s exactly what investors might be going through every single day!
Yes, you can still create your full fledge business plan, but having a summarized business plan as a front page before everything will do wonders.
So what happens if the investors prefer the longer, detailed business plan instead of the TLDR version?
Different businesses create different types of business plans depending on their situation. Some might create a 100-page official business plan while some might just only create a business plan with 5 pages.
However, if you’re creating a new business, our advice is to write what you think is necessary without concern about the page or word count.
If you’re lost or not sure what you’d want to write, refer to your TL;DR business plan! It’s just a matter of writing down a more detailed overviewed version of your business plan.
Don’t think you can do it? Don’t worry, we’ve got you covered. Your detailed business proposal should include these criteria.
This would be normally written last as you have to briefly give an overview of your business and its founders while convincing the readers why your business will be the solution to the problem faced by the target audience. You’ll need to give an overview of your target market.
Our advice is don’t slack off in this section as many businesses may evaluate your business’s worth based on your executive summary!
In this section, you will be covering the detailed section of your business and how it works. Specifically, it will be matters such as existing departments, employees that you have right now, and the current organizational charts.
You will also need to answer the question of will your business survive in the competitive environment. And what competitive advantage do you have that can make you unstoppable in this environment?
It’s time to talk about your plans for your business.
You can start with the goal or set the milestone that you’d want your company to achieve. It’s important to also split your goals into short-term and long-term ones to differentiate goals that are achievable in a short time while some might need more time.
You can also talk about how you’d like to expand and increase different departments by hiring talented people. And explain how that can benefit the business.
In the end, you can also talk about how your business can evolve through time and not just stay stagnant all the time.
In this section, you’ll need to determine:
Who are your potential customers and target audiences?
What is your target market?
To find out, you will be required to conduct a market analysis. Once you’ve identified your current market, you’ll also need to predict how your market will grow bigger in the years to come.
In this section, you will need to elaborate more about the product or services that you are currently planning to provide. This can range from features, price, variety and even benefits of the product or service you’re trying to sell.
You’ll also need to explain how your product or service can solve or overcome a problem that is always faced by your target audiences
If possible, you can also propose products and services that you’d want to develop in the future when you have sufficient manpower and resources.
In this section, you will need to find the answers to these questions:
How do you plan to reach your prospects or clients?
How do you plan to sell to those clients?
Logistics and costs of getting the product to the clients and potential problems that might be faced.
In this section, you can also do the SWOT (Strength Weakness Opportunity and Threat) analysis to show them what the company will face.
If you’re not a numbers person, this might be the most daunting section. But don’t let it intimidate you! Since everything is just a projection, you will only need to predict and estimate the following:
Sales and Revenue [Number of units sold X Price of product]
(Optional) Use of Funds - This will only be needed if you’re showing your business plan to an investor. Let investors know where the money invested will go.
Do take note that these are just the basic criteria when it comes to creating your own Business Plan. If you’re trying to attract investors with your business plan, feel free to add more details!
Writing a Business Plan is much easier than you thought. It’s just something you’ll need to put a lot of thought into. As you will need to not only identify and forecast your problems but also think of the solution to overcome them.
However, we would advise you to be honest with yourself! It sometimes might be tempting to put or alter the estimated figures to make them look promising to investors. But honestly speaking, if the numbers are too far-fetched, it will backfire and cause distrust between shareholders and investors. So, creating your business plan with integrity will go a long way.
Always remember, great things start from small beginnings!